Types of Medical Insurance

The main purpose of medical insurance is to help pay for health care expenses that you might incur due to an illness, accident or injury. There are a number of different types of health insurance plans, and each one has specific coverages and benefits. Some medical insurance plans also have a specific cost, or premium, that you must pay each month to keep your coverage active. The premium is typically paid through an employer, although under the Affordable Care Act, individuals can purchase health insurance on their own.

Health care costs are rising at a much faster rate than general inflation. As a result, medical insurance is becoming more important than ever before. Health insurance is not only an important financial safety net, but it can help you avoid accumulating debt that could impact your quality of life.

A common type of health insurance plan is the HMO or Health Maintenance Organization. An HMO is a type of managed care plan that usually requires that you get a referral from your primary care physician before seeing a specialist. In addition, an HMO will only cover treatment from providers that are in the provider network. These are the doctors, hospitals and other health care providers that your health insurance company has contracts with to provide care at a lower cost.

Preferred Provider Organization (PPO) plans are another type of managed care plan that offers more flexibility than an HMO. With a PPO, you do not need a referral from your doctor to see a specialist. However, you will likely pay more out-of-pocket expenses if you go to providers that are not in the network.

Supplemental health insurance, also known as Medicare supplemental insurance, is designed to pay for services that Original Medicare does not cover. It is available to anyone who has Medicare and pays a monthly premium to the insurance company. Some Medicare supplemental insurance policies offer benefits such as coverage for vision and hearing loss, prescription drug discounts and more.

Individual and family health insurance is available from private insurers. It is also possible to buy coverage through the Affordable Care Act’s marketplace, or exchange, which allows you to shop for and compare plans based on their premium, deductible, co-payments and provider networks.

A denial is a decision made by your health insurance company that a particular health care service or procedure is not covered by your policy. A health insurance provider may deny a claim because it considers the procedure to be experimental or investigational, not medically necessary, or because you have exceeded your deductible amount.

Medical insurance is regulated at the state level, so rules vary from one state to the next. Changes to legislation can affect how a health insurance policy is written, but it is still important to review the terms and conditions of your specific health insurance policy on an annual basis. You can do this by contacting your insurance company or a broker, who can provide more information on your specific policy.